BETA
Chapter 1
How compounding actually works
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Chapter 2
History of the compounding concept
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Chapter 3
The rule of 72 and mental math
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Chapter 4
Compounding in everyday life
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YOUR GOAL
Master of The magic of compound interest
Ch 1 · How compounding actually works
nic Drag coins into the machine to discover how compound interest doubles your money over time.
nic Compound Interest
Watch the interest earn interest, it builds on its own, Now we sit back and look at the empire we've grown.
nic Starting to save early is far more powerful than saving larger amounts of money later in life.
nic Simple interest only calculates earnings on the starting amount, while compound interest grows exponentially.
Fun Fact
The penny dilemma: If you double a single penny every day for 30 days, you will end up with over 5.3 million dollars.
Glossary
compound interest (noun)
Interest calculated on both the initial principal and the accumulated interest of previous periods. In 2000 BCE, ancient Babylonian scribes recorded some of the earliest calculations of these returns on returns.
Interest calculated on both the initial principal and the accumulated interest of previous periods. In 2000 BCE, ancient Babylonian scribes recorded some of the earliest calculations of these returns on returns.
Quiz
Which mathematical constant was discovered by Jacob Bernoulli in 1713 while studying continuous compound interest?
Quiz
If two people save the exact same total amount, who will end up with more money due to compounding?
Quiz
If you invest $1,000 at a 10% annual compound interest rate, how much total money will you have after two years?
Quiz
How does increasing the frequency of compounding (e.g., from annually to daily) affect your savings?